Yellowglen set for makeover in champagne fight

Eli Greenblat

TREASURY Wine Estates will introduce new packaging and branding for its sparkling wine house Yellowglen to arrest softening sales, as a proliferation of locally produced sparkling wines and heavily discounted imported champagne tempts drinkers away from the 40-year-old label.

The renewed marketing push will be targeted at the important $10 to $15 price bracket and coupled with the release of a new premium range of Yellowglen wines that will sell for around $49 and attempt to match well-known champagne houses in terms of flavour and quality.

Michelle Terry, managing director of the Treasury Wine Estates division that overseas Yellowglen, said the changes to the well-known label's look followed a year-long review of the brand.

''We looked at the commercial performance, where we were strong, where we were not strong, the market structure, trends and what was happening with the Australian dollar, movement of French competitors into the market and then also domestic competitors,'' Ms Terry said on Tuesday.

The review found that Yellowglen, Australia's No. 1 sparkling with a 25 per cent market share, was dominant in the $8 to $10 price range but had ceded territory and customers to its rivals when it came to $10-plus.

''We had seen some softening in our position in the market in the teens … so it's important for us that, given that is a growing market, we re-establish our credibility in that part of the market as well as in a premium offering,'' Ms Terry said.

The refresh would include packaging changes to be introduced between now and Christmas and a marketing campaign in the new year.

Yellowglen has improved its performance within the Treasury Wine Estates portfolio, with its core brands returning to growth in 2011-12 and up 3 per cent in Australia/New Zealand for the period. But the sparkling wine category in Australia has been overshadowed by the booming champagne market, fuelled by the high Australian dollar that makes the imported French bubbly highly price competitive.

A global oversupply of champagne has seen the close-knit French champagne houses look for markets to soak up excess supply, also forcing prices at the shelf down and closer to the traditional price points for sparkling wine.

According to industry data, champagne growth remains robust, up 10.5 per cent in value terms and 14.1 per cent in volume for the year to June.

Import competition, namely champagne, was a threat at higher price points for sparkling wine, Ms Terry said. ''Sometimes we see consumers trading up [to champagne] and that's one of the reasons why we are firmly trying to establish Yellowglen as the premier house of sparkling from Australia in that territory as well.''

As part of an added premium offering, Yellowglen has launched a new label called ''XV'' (Exceptional Vintage), which will have a limited supply and retail at $49-$59 a bottle. The XV range will use quality parcels of fruit from vineyards around Australia.